I have a customer in Port Perry that just bought a new Mac Mini Server running Lion and wanted to use the built in VPN service to allow a Windows 7 Laptop to connect.
Upon configuration of the VPN service, the Windows 7 laptop would get the following error on connection:
Error: 789 "The L2TP connection attempt failed because the security layer encountered a processing error during initial negotiations with the remote computer"
The problem was resolved by ensuring that both the "IKE and AuthIP IPsec Keying Modules" service and the "IPsec Policy Agent" service is configured to start automatically at start-up.